EnergyAustralia fined $750,000 for battery grid service failures

EnergyAustralia has been fined $750,000 by the Australian Energy Regulator (AER) for failing to meet its grid service obligations. The penalty covers ten separate infringement notices issued for breaches of frequency control ancillary services (FCAS) requirements.

FCAS is a critical market mechanism used to keep the frequency of the electricity grid within safe limits.

Regulatory Context

Justin Oliver, the AER’s Deputy Chair, emphasized that frequency control ancillary services form a vital safety net for the power system. He explained that these services prevent blackouts and protect electrical equipment from damage by maintaining grid stability. Oliver noted that battery operators must understand their specific operating limits to function effectively within this framework.

The regulator stressed that accurate market offers and strict compliance with AEMO’s dispatch instructions are mandatory as batteries assume a larger role in the electricity system. Oliver added that market participants must regularly monitor their assets and systems.

Breach Details

• Infringements occurred on multiple occasions during 2023 and 2024.
• Breaches involved four battery energy storage systems located in New South Wales and Victoria.
• The Australian Energy Regulator did not name the specific battery assets involved in the breaches.
• The breaches were identified after the Australian Energy Market Operator requested frequency control data following the February 13, 2024 storm.

Asset Portfolio

EnergyAustralia’s portfolio includes three battery energy storage systems (BESS) in New South Wales, ranging significantly in scale. The table below compares the commercial charge and dispatch rights held for each asset:

Asset Name	Capacity (MW)	Storage (MWh)
Gannawarra	25	50
Darlington Point	25	33
Riverina	65	87

While the Gannawarra and Darlington Point systems share identical power output ratings, their storage capacities differ by 17 MWh. The Riverina BESS is substantially larger, offering more than double the power capacity and nearly triple the energy storage of the other two facilities combined.

Resolution and Comparison

EnergyAustralia self-reported the breaches to the AER and repaid AEMO for the frequency control services it failed to provide. The company also worked constructively with the regulator throughout the investigation.

The $750,000 fine stands in contrast to a much larger sum paid by AGL Energy in 2023 for similar FCAS violations.

Storm Impact and AGL Penalty Scale

The February 13, 2024, storm that triggered the data review affected approximately 12,000 kilometres of Victorian distribution lines and 1,100 powerlines. At the event’s peak, more than 531,000 customers lost power, with over one million affected in total. Six transmission towers collapsed, and a major 500 kilovolt transmission line failed. Simultaneously, units at AGL’s Loy Yang A brown coal power station disconnected, prompting AEMO to call for load shedding to stabilise the network.

Regarding the comparative penalty, AGL Energy paid $6 million in 2023 for FCAS breaches committed by its coal plant fleet between 2018 and 2020. The AER initiated its broader compliance crackdown following the South Australia “system black” event and subsequent grid disturbances, which revealed that generator settings often differed from AEMO’s understanding.